BAT agrees to buy Reynolds for 49 billion dollars | Progresiv
British American Tobacco has agreed a 49.4 billion dollars takeover of U.S. rival Reynolds American Inc, creating the world's biggest listed tobacco company after it increased an earlier offer by more than 2 billion dollars. 
BAT, which already owned 42 percent of Reynolds, will pay 29.44 dollars in cash and 0.5260 BAT shares for each Reynolds share, it said, a 26 percent premium over the price of the stock on Oct. 20, the day before BAT's first offer was made public.
Reynolds, the maker of Camel and Newport cigarettes, rejected an initial approach in November, although the two sides remained in talks.
The deal, which values the whole of Reynolds at around $86 billion, will mark the return of BAT to the lucrative and highly regulated U.S. market after a 12-year absence, making it the only tobacco giant with a leading presence in American and international markets.
BAT Chief Executive Nicandro Durante said bringing the two companies together would create a market leader with brands including Newport, Lucky Strike, Camel and Pall Mall. "It will create a stronger, global tobacco and NGP (next generation products) business with direct access for our products across the most attractive markets in the world," he said.
The U.S. tobacco market was the most profitable outside China, he said in an interview, and BAT "figured there was some room to grow there."
BAT left the United States in 2004 when it merged its subsidiary Brown & Williamson with R.J. Reynolds to form Reynolds American in 2004. A decade later, the U.S. group agreed to buy Lorillard in a 27.4 billion dollars deal that added the Newport brand to its stable.
Durante said there was a clear rationale to bring the groups together, and an alignment in their relative trading multiples made an agreement possible.
"This is the right moment to make the deal; the multiples of BAT and Reynolds are closer than ever before," he said.
BAT would also be able to take Reynold's NGP portfolio, led by vaping brand Vuse, into its international markets, he said. (www.reuters.com)
